- - Thursday, January 5, 2012

This is my first column for 2012. What kind of year will the Washington-area real estate market have? That depends largely on one particular statistic: home listings.

The number of homes listed with area Realtors can tell us a lot about our housing market. It gives us a sense of where we’ve been and where we are headed.

It’s the supply part of the supply-and-demand equation. Listings tell us how many people want to sell their homes, either to move away or to move into another home in the area. If listings are pouring onto the market faster than people are buying them, the supply gets too large and the market stagnates.

Fortunately, listings were lower last year than in the previous three years, as you can see in today’s charts. During the first 11 months of 2011, about 100,000 homes were listed with Realtors. That’s 10 percent fewer than during the comparable period in 2010 and a drop of 42 percent compared to 2006.

I include 2006 because that was a record year for listings. It was the year when thousands of people realized the real estate boom was busting and wanted to sell before prices fell.

Unfortunately, the 174,000 homes listed in 2006 didn’t sell very well, and that’s why our inventory grew so large, causing prices to drop.

Remember that home listings are not the same as inventory. The inventory is the number of homes on the market on a given day. In other words, it is the volume of competition you face as a seller. If you are a buyer, the inventory represents the number of homes you can look at as you shop around.

The good news is that in 2011, listings fell and sales rose. That combination kept inventory down. At the end of November, inventory was down to 22,596, which is 23 percent smaller than in November 2008.

I have included Baltimore in today’s charts because listings there are down 22 percent this year, one of the biggest drops in the entire region. The largest increase was in tiny Falls Church, where listings rose 19 percent this year because of the city’s popularity with buyers.

Send email to csicks@gmail.com.

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